While there is a lot of talk, enthusiasm and general acceptance of cloud adoption and other technology upgrades from legacy systems, making the right decisions can be a headache and challenge for everyone from the IT managers to the C-level suite.
The Technology Business Management Council emerged as a spin-off of IT management solutions provider Apptio with an index of benchmarks intended to assess how technology leaders are improving value by applying business acumen to this decision-making process. The Council believes that while technology management is often overlooked, it shouldn't be because it has grown to be one of the biggest lines on annual budgets.
The overarching goal of the TBM Index is to provide an industry-validated benchmark on the state of technology business management. Designed to be a win-win scenario, the TBM Council is interested in understanding how technology business management varies by each industry, geography, IT operating model, etc., while the Council attempts to curate and optimize its recommendations to companies nationwide.
I recently sat down with Robert Webb, director of the TBM Council and former chief information officer of Hilton Worldwide, and Chris Pick, president of the TBM Council and chief marketing officer of Apptio, to find out what they think are the most biggest challenges for IT departments and how the Council is coming up with best practices for more effectively running IT as a business.
What are the most pressing burdens on IT right now?
CP: One of the biggest issues is to define the standard framework by which everyone can be on the same page relative to the solutions out there. That conversation creates a common playing field to unify around a framework. No one has a very consistent approach to understanding the issues to building a transparent planning processes.
Supply is always limited, but demand is infinite. With that basic understanding, there is a real desire to transform services, so the business quite frankly understands what they're getting is cost-effective and is of quality. What is happening to the CIO is they lost a monopoly to provide raw components and services to the business. So they have to deconstruct the services being offered to understand the cost of bill of materials, determining what can be swapped out, etc.
What are some best practices for running IT more effectively?
RW: If you're a CIO and you want to run technology as a business, the key is to have transparency and strong influence over the standard cost categories so you can shift the mix to run the shop for innovation and growth. Ideally, that's how you move the business forward.
The Council provides the opportunities to share best practices. The framework provides the structured way. The tools provide the automated process so it's not a one-time demonstration of efficiency opportunities but an ongoing discipline of how IT is run. It's managing the entire enterprise on everything from core infrastructure, apps, Software-as-a-Service (SaaS), and cloud-based services to management over a portfolio of projects that companies will be taking on (innovation- and productivity-related) -- the full suite of areas where the CIO is involved.
What are the hurdles to implementing these benchmarks?
RW: The challenges for the implementing TBM benchmarks would be consistency and discipline related to a standard chart of accounts for IT. How do you define what that standard cost category looks like so you can compare your service across different parts of your business?
Another challenge is ensuring that you have the full grasp of all of those services. Within many IT organizations, there is hidden and decentralized forms of IT where business partners have provisioned SaaS without a CIO's approval or knowledge. So the CIO has to cast a wide net so that all tech services are captured in order to have have a logical comparison.
CP: The framework is really a construct about how you look at the journey. What needs to be overcome is relative to imperfect data. Many executives think, "My data isn't perfect. I don't know if I have access to it." There needs to be technology to pull data together. There needs to be the ability to integrate financial and operational data that meets the needs of activity- based modeling so you can show consumption to the business at a distinctive price point.
Another area is enabling people to self-serve the answers and provide analytics. Instead of it being an expert who has associations of data in their mind, it has to be someone in the business who sees the "a-ha" moment and reduces costs. You might not have that expert, so codifying best practices to provide use cases and storage re-tiering. These are all opportunities that people want to leverage to create their journeys.
Are there industries more responsive to TBM best practices than others?
RW: The industries that have the most significant opportunity to embrace business technology management are those industries that are technology intensive and high degree of fragmentation. This includes multi-national companies comprised of multiple divisions with decentralized IT costs structures and relatively poor visibility into IT operating expenses and capital investment. The bottom line is if you want to be a great CIO, you need to have the instrumentation that the TBM discipline and tools like Apptio provide.
CP: From consumer products to financial services to healthcare, you name it, they're there. All of these leaders believe they're coming in -- they're not just the CIO. They want to be a competitive service provider to the business and more strategic. The closer they can be to providing value to the business, they're really doing their job extremely well.
That's the first trend we see. Clearly there are businesses depending highly upon technology. We didn't call this the IT management council. We called this the Technology Management Council for a reason. In creating value for their customers, we recognize it might not be in IT -- it might be in a business where the product is a technology product.
Image via The TBM Council